Interesting Trends in the Housing Market
Over 27 million Americans moved last year to take advantage of lower interest rates and the flexibility of remote work–in addition to the usual motives of buying up to accommodate a growing family, buying down for the opposite reason or relocating to be closer to family/friends..
Overall, however, homeowners stayed in their homes longer, for 13.2 years, an increase from 2012, when they stayed for 10.1 years, according to a report from Redfin. Baby Boomers’ desire to ‘retire-in-place’ at least partially explains the longer tenure. Older Americans now make up a larger proportion of the population than they did 10 years ago, with 33% of household heads over 65 in 2019 compared to 28% in 2012.
The Mortgage Bankers Association issues a Weekly Applications Survey and recently reported that rising interest rates are denting homebuyer demand for purchase mortgages. This, along with the understandable drop in refinance applications, spells slower times for the mortgage industry. Loan officers DID report an uptick in 5/1 adjustable rate mortgage applications, which still feature low-3% initial interest rates.
Fewer people are moving to Colorado. According to Elizabeth Garner, the state demographer, only 27,340 people moved to CO in 2020, compared to 34,162 people in 2019 and 68,844 people in 2015. Garner’s office still expects Colorado to add 1.8 million people by 2050. She commented that municipalities should “think strategically” about what effect the trend may have in terms of tax base, school capacities, traffic issues, etc.
The U.S. Census Bureau recently reported that the nation added roughly 23 million people between 2010 and 2020, a 7% gain, totaling 331+ million. The population grew by nearly 10% in the preceding decade. 12% of Americans moved in 2020.
Some of these shifts have a greater impact on housing than others, but all help to explain changes in our market. We monitor these and other trends to keep our clients up to date on developments we see on the horizon
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